US West Coast port operations resume after partial shutdown

Published 6:28 AM ET Tue, 10 Feb 2015
Reuters

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U.S. West Coast port operations resumed in full on Monday after shipping companies halted loading and unloading of freighters for the weekend, citing chronic cargo backups that shippers and dockworkers have blamed on each other during months of labor tensions.

But a planned resumption of federally mediated contract talks was pushed back until Wednesday without explanation, even as the White House joined retailers and manufacturers in urging the sides to redouble efforts to settle a dispute that has rippled through the U.S. commercial supply chain.

Shippers and terminal operators announced last week they would suspend cargo crane operations for container vessels at the ports on Saturday and Sunday because of mounting congestion that they said had brought the docks to virtual gridlock.

Bob Riha, Jr. | Reuters

Ships gather off the ports of Los Angeles and Long Beach, California in this aerial photo taken February 6, 2015.

Still, work continued in the terminal yards through the weekend to clear cargo containers stacking up on the waterfronts, at least at the five busiest ports—Los Angeles, Long Beach, Oakland, Seattle and Tacoma, according to management spokesman Steve Getzug.

Both sides said full port operations were restored on Monday as planned. The 29 ports affected handle nearly half of all U.S. maritime trade and more than 70 percent of Asian imports.

The companies have accused the International Longshore and Warehouse Union of instigating work slowdowns since October to gain leverage for 20,000 dockworkers whose contract talks with the Pacific Maritime Association have dragged on for nine months.

The union faults the carriers for worsening congestion, citing changes in shipping practices. Union officials have said a settlement is near, and characterized the shippers' weekend move as posturing aimed at exaggerating the magnitude of the crisis.

The companies have said they remained at odds with the union over several issues, including the system for binding arbitration of contract disputes.

Ripple effects

Port slowdowns have trickled through the U.S. distribution chain, disrupting shipments of a wide range of goods affecting agriculture, manufacturing, transportation and retail.

The Obama administration is monitoring the situation and urged an expeditious resolution, but the dispute "is up to the two parties to resolve at the bargaining table," White House spokesman Frank Benenati said,

The last time contract talks led to a full shutdown of the West Coast ports was in 2002, when the companies imposed a lockout that was lifted 10 days later under a court order sought by President George W. Bush, invoking the 1947 Taft-Hartley Act.

The shipping industry has estimated the 2002 lockout caused $15.6 billion in economic losses. When it ended, some 200 freighters were waiting at anchor to be unloaded up and down the coast.

By comparison, 23 vessels were anchored awaiting berths on Monday outside Los Angeles and Long Beach, down from 31 on Sunday, port authorities said. Another 13 freighters were idled off the Puget Sound ports of Tacoma and Seattle.

Once a settlement is reached, it will take six to eight weeks to clear out the immediate backlog at the ports of Los Angeles and Long Beach—the nation's two busiest container cargo hubs—and possibly a few months more to restore freight traffic to normal, port representatives said.

The National Association of Manufacturers and the National Retail Federation have projected that a new 10-day port shutdown could cost the U.S. economy at least $2 billion a day. Both groups renewed their calls on Monday for the administration to ratchet up pressure for a settlement.

"If the administration can impart a message of urgency, that would certainly be helpful," said Robyn Boerstling, transportation director for the manufacturers group.

She said a number of manufacturers had reported that uncertainty surrounding the ports dispute had led some Asian buyers to cancel U.S. factory orders.

Industry executives say many retailers were already rerouting some seagoing shipments through the Eastern seaboard, the Gulf Coast, Mexico and Canada, as well as via air freight, changes that could add billions of dollars in costs to the supply chain.

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